Delay Lets Military Health Fraud Suspects Off Hook

MADISON, Wis. (AP) - A dozen defendants who allegedly swindled the military's health care program out of hundreds of thousands of dollars in the Philippines won't face justice or pay any restitution after authorities failed to arrest them.

The U.S. Attorney's Office in Madison, Wis., has dismissedindictments against the suspects - Philippine doctors, spouses ofmilitary retirees and one Navy veteran - because of lengthypretrial delays.

Several of them had confessed to their roles in schemes in the1990s and early 2000s in which they filed fraudulent claims to themilitary's Tricare program, which paid out money to cover healthservices never provided, court records show. They were indictedbetween 1999 and 2003 as part of an investigation into widespreadTricare fraud.

But U.S. authorities failed to bring them to justice. Theydecided to wait for the suspects to step foot on U.S. soil so theycould be arrested but they either never did or weren't caught. In2006, prosecutors finally asked the Philippines government toarrest and extradite five of the suspects but those attemptsfailed.

The 12 cases were dismissed last month after U.S. District JudgeBarbara Crabb in November threw out an indictment against aFilipino doctor accused of submitting $2 million in fraudulentclaims. Crabb said his right to a speedy trial was violated becauseinvestigators waited until 2008 to arrest him when he set foot inGuam, four years after he was indicted.

Crabb said the delay made it difficult for the doctor to preparea defense because the passage of time meant the memories ofwitnesses had faded. She said prosecutors' "decision to do nothingfor more than four years" wasn't justified.

Based on that ruling, Assistant U.S. Attorney Peter Jarosz saidit was clear he had to dismiss cases against the others. He said itis difficult to quantify the exact amount they were accused ofobtaining fraudulently. Court documents suggest it was at least$400,000 but likely more since prosecutors did not file charges forevery suspect claim.

Among those getting off the hook is a doctor who toldinvestigators how she would make false claims on behalf of militaryretirees and their dependents and then give them a portion of themoney.

She gave investigators two log books filled with the names ofpatients her clinic had falsely claimed to treat. "I know it wasfraudulent but I just took the risk," she told investigators.

Also getting off: - A U.S. Navy retiree, who was accused of working with a doctorto submit 21 false claims for him and his dependents totaling$133,000. - The wife of a retired Marine who submitted false claimstotaling $49,000 for her and her child. - The wife of a retired U.S. Air Force serviceman who said sheused her windfall to pay for her children's education. "I knowwhat I am doing is wrong," the woman told investigators.

The defendants never appeared in U.S. court or even had defenseattorneys since the cases never got off the ground.

Prosecutors have defended their decision not to seek extraditionin some cases, arguing the Philippines government would likely failto execute the request or botch it. They cited one example in whicha suspect learned of his warrant through a newspaper and wentunderground.

In November's ruling, Crabb wrote the decision to wait forsuspects to step on U.S. soil might have been reasonable initially"but as time wore on, it became all the more pressing for thegovernment to do something."

The ruling and dismissals were a setback for an investigationthat has otherwise won praise. More than a dozen people have beenconvicted of Tricare fraud in recent years, including U.S. militaryretirees. The probe is handled by Wisconsin-based federalprosecutors because WPS Health Insurance in Madison holds thecontract to process many of the claims.

In the biggest case, Health Visions Corp. submitted fraudulentand inflated claims to bilk the U.S. government of $100 millionbetween 1998 and 2004. The company and a former executive have beenordered to pay back the full amount and the government is in theprocess of trying to recoup some money from the sale of its assets.

A string of internal audits have faulted the Pentagon'smanagement of Tricare, warning that lax controls make the programvulnerable to fraud overseas. Its managers say they are takingsteps to tighten them but note the complexity of a program thatprovides benefits all over the globe.

Copyright 2015 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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